Front Page Titles (by Subject) 7. Documentary Reserve. - Money and the Mechanism of Exchange
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7. Documentary Reserve. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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7. Documentary Reserve.
It might seem enough in order to ensure the convertibility of notes, that the bankers issuing them should prove their possession of abundant funds, in the form of government stocks, bonds, exchequer bills, rentes, or even good mercantile bills, sufficient to establish the perfect solvency of the firm. If a considerable margin be left, it may seem impossible that the notes should not ultimately be paid. To argue in this way, however, is to forget that banknotes are promises to pay gold or legal tender metallic money on demand, and that to pay the notes ultimately is not to pay them on demand. With such a reserve, payment can only be made in any large quantity by selling the stocks and bonds for metallic money; but it is just when there is a scarcity of gold and silver, that notes are presented for payment. No doubt good government funds and good bills can always be sold at some price, so that a banking firm with a strong reserve of this kind might always maintain their solvency. But the remedy might be worse for the community than the disease, and the forced sale of the reserve might create such a disturbance in the money market as would do more harm than the suspension of payment of the notes. Payment of notes on demand implies the possession of adequate gold and silver, and if there be not sufficient bullion and coin in the country, no paper documents, or promises to pay at a future day, can take their place.